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2009 INTERIM FINANCIAL REPORT

ESSILOR INTERNATIONAL

This is a free translation into English of the 2009 Interim Financial Report issued in French.

Contents

First-half 2009 Management Report p. 2

First-half 2009 Condensed Consolidated Financial Statements p. 7

Statement by the Person Responsible for

the 2009 Interim Financial Report p. 31

Statutory Auditor’s Review Report on the First-half Year

Financial Information for 2009 p. 32

2

MANAGEMENT REPORT

First-Half 2009

€ millions First-half 2009 First-half 2008 % Change

Revenue 1,663.4 1,520.2 +9.4%

Contribution from operations(1)

% of revenue

302.6

18.2%

276.3

18.2%

+9.5%

Operating profit 281.9 261.7 +7.7%

Profit attributable to equity holders

of Essilor International

% of revenue

202.4

12.2%

198.3

13.0%

+2.1%

Basic earnings per share (in €) 0.98 0.96 +2.4%

(1) Operating profit before compensation costs of share-based payments, restructuring costs, other income and expense,

and goodwill impairment.

Revenue up 9.4% to €1,663.4 million

Essilor’s consolidated revenue for the six months ended June 30, 2009 rose by 5.3%, excluding the currency effect, and

eased by 0.7% like-for-like. Changes in the scope of consolidation increased revenue by 6.0%, reflecting the contributions of

the businesses acquired in 2008 and in the first half of 2009. The currency effect was a positive 4.1%, lifting growth to 9.4%.

The like-for-like decrease in first-half revenue included a decline of 1.0% in the first quarter and of 0.4% in the second,

reflecting the following factors:

- The successful launch of value-added products around the world, including the new Crizal Forte® anti-reflective

lens, the Essilor Transitions® VI variable-tint lens in Europe, the Xperio™ polarized lens in the United States and the

new MrBlue™ edger.

- Firm growth in entry-level products, where Essilor holds strong positions.

- A disappointing first-quarter performance in Instruments.

3

Revenue by region

€ millions H1 2009 H1 2008 % Change

(reported*)

% Change (like-

for-like)

Change in scope

of consolidation

Europe 665.1 693.5 -4.1% -4.4% +2.0%

North America 718.1 617.9 +16.2% -0.9% +4.3%

Asia-Pacific 170.1 146.8 +15.9% +13.5% +1.3%

Latin America 60.3 60.6 -0.5% +9.4% +0.7%

Laboratory equipment 1 49.8** 1.4*** n.a. n.a. n.a.

(*) Currency effect: +4.1%. (**) The figure excludes Satisloh sales to Essilor, which totaled €14.8 million. (***) Satisloh was

not part of the Group in first-half 2008.

Eleven external growth transactions in the first half

During the first half, Essilor acquired or increased its holding in eleven companies. Together, they represent additional full-

year revenue of €47 million for a total investment of €36.9 million.

• In the United States, Essilor of America added three laboratories to its network: Barnett & Ramel ($10.8 million in

revenue), McLeod ($10 million) and Abba Optical $2.2 million).

• In Poland, Essilor raised its stake in JZO, the ophthalmic optics market leader, to 51% from 10% previously.

• In Australia, Essilor completed four acquisitions representing an aggregate €3.6 million in full-year revenue. Equity

interests were acquired in three prescription laboratories—Prescription Glass Pty Ltd, Precision Optics Pty Ltd and

Wallace Everett Lens Technology Pty Ltd—and a 50% stake was acquired in Sunix Computer Consultants, a leading

developer of optometric practice management systems.

• In India, Essilor raised its interest in GKB Rx Lens Private Ltd to 60% from 50%.

• In Brazil, Essilor acquired a majority stake in Technopark, a joint venture with a local partner that combines the

business operations of two prescription laboratories (€10 million in revenue).

• In Canada, Nikon Optical Canada, a Nikon-Essilor subsidiary, increased its stake in the TechCite prescription laboratory

from 50 to 100%.

(1)Application of IFRS 8 – Operating Segments has resulted in the creation of the “Laboratory Equipment” business segment, which includes the machines, consumables and replacement parts sold by Satisloh and Delamare to prescription laboratories. The change has not has a material impact on revenue from the operating regions, which consolidate all of the other sales (primarily of ophthalmic lenses and optical instruments).

4

Gross margin up 7.3% to €930.7 million

Gross margin (revenue less cost of sales, expressed as a percentage of revenue) stood at 56.0%, compared with 57.0% in

first-half 2008. The decrease results mainly from the dilutive impact of acquisitions, in particular Satisloh.

Operating expenses up 6.3% to €628.1 million

Operating expenses in the first half accounted for 37.8% of consolidated revenue, versus 38.9% in the prior-year period,

when they amounted to €590.7 million. Operating expenses comprised:

• R&D and engineering costs of €74.9 million (net of a €4.9 million tax credit), representing 4.5% of consolidated

revenue, down very slightly from 4.7% in the first six months of 2008.

• Selling and distribution costs of €353.4 million (21.2% of revenue compared with 21.7% in the previous-year period).

• Other operating expenses of €199.8 million (12.0% of revenue versus 12.5% in first-half 2008).

Contribution from operations up 9.5% to €302.6 million

The contribution margin stood at 18.2% of revenue, on a par with first-half 2008’s record high and up from 17.9% for full-

year 2008. This performance reflects the Company’s ability to integrate acquisitions, to drive further productivity gains and

to diligently manage its operating expenses in a slowing market.

Operating profit up 7.7% to €281.9 million

“Other income and expenses from operations” and “Gains and losses on asset disposals” together represented a net

expense of €20.7 million (compared with €14.6 million in first-half 2008). Compensation costs on stock options,

performance share grants and employee stock ownership plans declined to €9.7 million from €12.3 million in first-half 2008,

while restructuring costs related to the closing of several production facilities rose to €6.5 million from €0.2 million for the

prior-year period.

Operating profit represented 17.0% of consolidated revenue.

Finance costs and other financial income and expenses: net expense of €5.3 million

Finance costs and other financial income and expenses represented a net expense of €5.3 million compared with net

income of €2.9 million in first-half 2008, reflecting the increase in finance costs, which mainly concerned the financing of

the Satisloh acquisition and the share buyback program.

5

Profit attributable to equity holders of Essilor International up 2.1% to €202.4 million

Net profit totaled €207.1 million, an increase of 2.8%. It comprised:

• Income tax expense of €80.1 million. The 29.0% effective tax rate compared with a 29.4% rate for first-half 2008. The

decline was mainly due to Satisloh’s tax rate, which is lower than the Company average.

• The share of profit from associates—VisionWeb, Sperian Protection and Transitions—which amounted to €10.7 million,

versus €14.7 million in first-half 2008. Transitions’ earnings were up slightly at €9.8 million (from €9.6 million in first-

half 2008) while Sperian Protection’s earnings were sharply lower at €0.9 million (compared with €5.1 million).

Profit attributable to equity holders of the parent was 2.1% higher, at €202.4 million. Earnings per share rose by 2.4% to

€0.98.

Inventories

Inventories amounted to €493 million at June 30, 2009, compared with €475 million at year-end 2008, an increase of 3.8%.

Like-for-like, the increase was 2.1%.

Investments

Capital expenditure net of divestments totaled €72 million or 4.3% of consolidated revenue. Financial investments net of

disposals amounted to €60.9 million. Of this amount, acquisitions accounted for €36.9 million, while buybacks of shares

accounted for €19.5 million.

Cash Flow Statement

€ millions

Net cash from operations 273 Capital expenditure net of the proceeds

from asset sales

72

Proceeds from employee share issue 16 Change in WCR and provisions 102

Change in net debt 99 Dividends 138

Financial investments net of disposals 61

Effect of changes in exchange rates and

in the scope of consolidation

15

6

Net debt increased by €99 million to €211 million, from €112 million at year-end 2008 as the Company’ high profitability

and robust performance enabled it to pursue an ambitious financial investment program involving acquisitions and share

buybacks and to increase dividends. Net debt was also affected by the seasonal impact of annual discount payments to

customers, which are generally concentrated in the first half. Net cash flow (cash flow less capital expenditure) rose by

12.5% to €99 million.

Related party transactions / Risks and contingencies

In first-half 2009, the nature of transactions with companies consolidated by the proportionate or equity method was not

significantly different from the description in the 2008 Registration Document. Similarly, risks and contingencies to which

the Company is exposed in the months ahead are generally in line with the analysis presented in Chapter 4 of the

Registration Document.

Outlook

In the second half of the year, Essilor will continue to grow the business, leveraging the quality of its products and its

services to opticians, backed by an acquisitions strategy that extends across all regions. The Company will also pursue its

efforts to maintain a high operating margin. Over the full year, Essilor expects to strengthen its presence in all markets.

------------------------------

7

INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

SIX MONTHS

ENDED JUNE 30, 2009

8

CONSOLIDATED STATEMENT OF INCOME

First half First half 2008

€ thousands, except for per share data Notes 2009 2008

Revenue 3 1,663,413 1,520,194 3,074,419

Cost of sales (732,684) (653,165) (1,325,106)

GROSS MARGIN 930,729 867,029 1,749,313

Research and development costs (74,909) (71,258) (144,518)

Selling and distribution costs (353,431) (329,169) (672,268)

Other operating expenses (199,775) (190,284) (381,368)

CONTRIBUTION FROM OPERATIONS 302,614 276,318 551,159

Other income and expenses from

operations, net

4 (20,433) (14,723) (35,999)

Gains ans losses on asset disposales, net (313) 117 (629)

OPERATING PROFIT 3 281,868 261,712 514,531

Finance costs (16,518) (12,382) (28,181)

Income from cash and cash equivalents 9,051 14,370 29,042

Other financial income and expenses, net 5 2,130 958 (3,368)

Share of profits of associates 3 10,698 14,671 26,053

PROFIT BEFORE TAX 287,229 279,329 538,077

Income tax expense (80,132) (77,907) (149,266)

PROFIT FOR THE PERIOD 207,097 201,422 388,811

Attributable to equity holders of

Essilor International

202,435 198,313 382,356

Attributable to minority interests 4,662 3,109 6,455

Earnings per share

Basic earnings per share (€) 0.98 0.96 1.85

Weighted average number of shares

(thousands)

6 206,623 207,225 206,875

Diluted earnings per share (€) 0.96 0.94 1.81

Diluted weighted average number of

shares (thousands)

213,185 214,537 213,615

9

CONSOLIDATED STATEMENT OF TOTAL RECOGNIZED INCOME AND EXPENSES

First-half 2009

(6 months)

First-half 2008

(6 months)

2008

(12 months)

(€ thousands)

Attributable

to equity

holders of

Essilor

Attributable

to minority

interests

Attributable

to equity

holders of

Essilor

Attributable

to minority

interests

Attributable

to equity

holders of

Essilor

Attributable

to minority

interests

International Total International Total International Total

Profit for the period (a) 202,435 4,662 207,097 198,313 3,109 201,422 382,356 6,455 388,811

Valuation gains and losses on derivative financial instruments, net of tax

Cash flow hedges, effective portion (1,500) (1,500) 3,880 3,880 11,418 11,418

Tax 552 552 (1,046) (1,046) (3,401) (3,401)

(948) (948) 2,834 2,834 8,017 8,017

Hedges of net investments in foreign operations, effective portion 1,088 1,088 1,379 1,379 230 230

Tax (375) (375) (475) (475) (80) (80)

713 713 904 904 150 150

Transfers to profit for the period, net of tax:

Cash flow hedges, effective portion (3,321) (3,321) (3,285) (3,285) (4,367) (4,367)

Tax 873 873 593 593 1,323 1,323

(2,448) (2,448) (2,692) (2,692) (3,044) (3,044)

Hedges of net investments in foreign operations, effective portion 25 25 (2,757) (2,757) (2,836) (2,836)

Tax (12) (12) 949 949 976 976

13 13 (1,808) (1,808) (1,860) (1,860)

Valuation gains and losses on non-current financial assets, net of tax 369 369 (285) (285) (1,699) (1,699)

Tax (135) (135) 101 101 499 499

234 234 (184) (184) (1,200) (1,200)

Actuarial gains and losses on defined benefit obligations, net of tax (906) (906) 3,037 3,037 (9,084) (9,084)

Tax 263 263 (923) (923) 3,223 3,223

(643) (643) 2,114 2,114 (5,861) (5,861)

Translation adjustments to hedging and revaluation reserves 84 84 191 191 (594) (594)

Translation adjustments to other reserves and profit for the period 7,033 (370) 6,663 (59,295) (924) (60,219) (6,983) (360) (7,343)

Income (expense) recognized directly in equity, net of tax (b) 4,038 (370) 3,669 (57,936) (924) (58,860) (11,375) (360) (11,735)

Total recognized income and expense, net of tax (a) + (b) 206,473 4,292 210,765 140,377 2,185 142,562 370,981 6,095 377,076

10

CONSOLIDATED BALANCE SHEET

ASSETS

€ thousands Notes June 30,

2009

December 31,

2008

Goodwill 7 994,929 957,605

Other intangible assets 204,136 205,249

Property, plant and equipment 811,236 811,484

INTANGIBLE ASSETS AND PROPERTY, PLANT AND

EQUIPMENT, NET

3 2,010,301 1,974,338

Investments in associates 189,945 164,690

Other long-term financial investments 47,504 44,214

Deferred tax assets 55,451 51,955

Long-term receivables 9,117 8,093

Other non-current assets 928 693

OTHER NON-CURRENT ASSETS, NET 302,945 269,645

TOTAL NON-CURRENT ASSETS, NET 2,313,246 2,243,983

Inventories 493,237 475,299

Prepayments to suppliers 10,322 9,521

Short-term receivables 732,812 684,797

Current income tax assets 15,059 5,859

Other receivables 39,585 37,294

Derivative financial instruments 48,064 50,996

Prepaid expenses 24,507 21,242

Marketable securities 33,123 32,538

Cash and cash equivalents 8 454,251 505,571

CURRENT ASSETS 1,850,960 1,823,117

Non-current assets held for sale

TOTAL ASSETS 4,164,206 4,067,100

11

CONSOLIDATED BALANCE SHEET

EQUITY AND LIABILITIES

En milliers d'euros Notes 30 juin 2009

31 décembre

2008

Share capital 38,099 37,984

Additional paid-in capital 327,595 311,765

Retained earnings 2,085,471 1,829,870

Treasury stock (172,889) (153,407)

Oceane conversion option 22,206 22,206

Hedging and revaluation reserves (12,104) (9,109)

Translation reserve (63,122) (70,235)

Profit attributable to equity holders of Essilor

International 202,435 382,356

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF

ESSILOR INTERNATIONAL 2,427,691 2,351,430

Minority interests 24,041 14,544

TOTAL EQUITY 2,451,732 2,365,974

Provisions for pensions and other post-

employment benefit obligations 131,574 132,401

Long-term borrowings 8 460,472 437,617

Deferred tax liabilities 19,759 22,406

Long-term payables 2,375 2,359

NON-CURRENT LIABILITIES 614,180 594,783

Provisions 42,839 36,720

Short-term borrowings 8 238,073 212,835

Customer prepayments 6,802 8,611

Short-term payables 585,056 631,945

Taxes payable 45,253 35,626

Other liabilities 159,104 143,159

Derivative financial instruments 13,170 28,480

Deferred income 7,997 8,967

CURRENT LIABILITIES 1,098,294 1,106,343

TOTAL EQUITY AND LIABILITIES 4,164,206 4,067,100

12

CONSOLIDATED CASH FLOW STATEMENT

€ thousands

First-half

2009

(6

months)

First-half

2008

(6

months)

2008

(12 months)

PROFIT FOR THE PERIOD 207,097 201,422 388,811

Share of profits of associates, net of dividends received (9,292) 6,695 20,637

Depreciation, amortization and other non-cash items 74,822 68,780 148,886

Profit before non-cash items and share of profits of

associates, net of dividends received 272,627 276,897 558,334

Provision charges (reversals) 3,638 357 9,810

Gains and losses on asset disposals, net 347 (88) 629

Cash flow after income tax expense and finance costs,

net 276,612 277,166 568,773

Finance costs, net 7,754 (1,801) (692)

Income tax expense (current and deferred taxes) 80,132 77,908 149,266

Cash flow before income tax expense and finance costs,

net 364,498 353,273 717,347

Income taxes paid (85,444) (66,362) (144,650)

Interest (paid) and received, net (3,394) 7,205 8,607

Change in working capital (102,825) (106,748) (84,503)

NET CASH FROM OPERATING ACTIVITIES 172,835 187,368 496,801

Purchases of property, plant and equipment and

intangible assets (73,554) (96,304) (184,298)

Acquisitions of subsidiaries, net of the cash acquired (32,220) (55,271) (452,879)

Purchases of available-for-sale financial assets (2,852) (5,763) (4,673)

Purchases of other long-term financial investments (4,231) (12,333) (11,978)

Proceeds from the sale of subsidiaries, net of the cash sold 0

Proceeds from the sale of other non-current assets 2,510 1,735 3,799

NET CASH USED IN INVESTING ACTIVITIES (110,347) (167,936) (650,029)

Issue of share capital 15,945 21,675 31,385

(Purchases) and sales of treasury stock, net (19,576) (64,534) (112,613)

Dividends paid to:

- Equity holders of Essilor International (136,189) (128,393) (128,393)

- Minority shareholders of subsidiaries (1,755) (120) (188)

Repayments of borrowings other than finance lease

liabilities 37,739 635 177,782

Purchases of marketable securities * (585) (676) (1,359)

Repayments of finance lease liabilities (1,242) (1,389) (2,644)

Other movements 1,527 (81) 473

NET CASH (USED IN) FROM FINANCING ACTIVITIES (104,136) (172,883) (35,557)

NET (DECREASE) INCREASE IN CASH AND CASH

EQUIVALENTS (41,648) (153,451) (188,785)

Cash and cash equivalents at January 1 486,765 677,164 677,164

Effect of changes in exchange rates (1,436) (1,182) (1,614)

CASH AND CASH EQUIVALENTS AT PERIOD-END 443,681 522,531 486,765

Cash and cash equivalents reported in the balance sheet 454,251 536,066 505,571

Bank overdrafts (10,570) (13,535) (18,806)

* Units in money market funds not qualified as cash equivalents under IAS 37.

13

STATEMENT OF CHANGES IN CONSOLIDATED EQUITY

♦ First-half 2009

(€ thousands)

Share

capital

Additiona

l paid-in

capital

Revalu-

ation

reserves

Oceane

conversi

on

option

Retained

earnings

Translatio

n reserve

Treasury

stock

Profit

attributabl

e to equity

holders of

Essilor

Internation

al

Equity

attributable

to equity

holders of

Essilor

International

Minorit

y

interest

s

Total

equity

Equity at January 1, 2009 37,984 311,765 (9,109) 22,206 1,829,870 (70,235) (153,407) 382,356 2,351,430 14,544 2,365,974

Issue of share capital

- To the corporate mutual funds 76 10,992 11,068 11,068

- On exercise of stock options 39 4,835 4,874 4,874

- On conversion of Oceane bonds 3 3 3

- Paid up by capitalizing reserves

Cancellation of treasury stock

Shares transferred out of treasury stock in exchange

for Oceane bonds

Share-based payments 9,608 9,608 9,608

Purchases and sales of treasury stock, net (94) (19,482) (19,576) (19,576)

Appropriation of profit 382,356 (382,356)

Effect of changes in scope of consolidation on

minority interests

6,960 6,960

Dividends (136,189) (136,189) (1,755) (137,944)

Transactions with shareholders 115 15,830 0 0 255,681 0 (19,482) (382,356) (130,212) 5,205 (125,007)

Total income and expense for the period recognized directly in

equity

(3,079) (3,079) (3,079)

Profit for the period 202,435 202,435 4,662 207,097

Exchange differences on translating foreign

operations

84 (80) 7,113 7,117 (370) 6,747

Total recognized income and expenses 0 0 (2,995) 0 (80) 7,113 0 202,435 206,473 4,292 210,765

Equity at June 30, 2009 38,099 327,595 (12,104) 22,206 2,085,471 (63,122) (172,889) 202,435 2,427,691 24,041 2,451,732

14

♦ First-half 2008

(€ thousands)

Share

capital

Addition

al paid-in

capital

Revalu-

ation

reserves

Oceane

conversi

on

option

Retained

earnings

Translatio

n reserve

Treasury

stock

Profit

attributa

ble to

equity

holders

of Essilor

Internatio

nal

Equity

attributabl

e to equity

holders of

Essilor

Internatio

nal

Minori

ty

interes

ts

Total

equity





- On conversion of Oceane bonds 30 4,430 (565) 276 4,171 4,171

Cancellation of treasury stock (64,052) (64,052) (64,052)

Oceane buybacks

Share-based payments 12,175 12,175 12,175

Purchases and sales of treasury stock, net (482) (482) (482)

Appropriation of profit 366,740 (366,740)


minority interests

(1,527) (1,527)

Dividends (128,393) (128,393) (120) (128,513)

Transactions with shareholders 138 21,537 0 (565) 250,316 0 (64,052) (366,740) (159,366) (1,647) (161,013)


equity

1,168 1168 1,168



operations

191 (577) (58,718) (59,104) (924) (60,028)

Total recognized income and expenses 0 0 1,359 0 (577) (58,718) 0 198,313 140,377 2,185 142,562

Equity at June 30, 2008 38,168 351,417 (3,358) 22,843 1,815,730 (119,965) (165,962) 198,313 2,137,186 12,628 2,149,814

15

♦ Fiscal 2008

(€ thousands)

Share

capital

Addition

al paid-in

capital

Revalu-

ation

reserves

Oceane

conversi

on

option

Retained

earnings

Translati

on

reserve

Treasury

stock

Profit

attributabl

e to equity

holders of

Essilor

Internation

al

Equity

attributable

to equity

holders of

Essilor

International

Minority

interests

Total

equity





- On conversion of Oceane bonds 30 4,432 (565) 275 4,172 4,172

- Paid up by capitalizing reserves

Cancellation of treasury stock (288) (53,720) 54,008

Shares transferred out of treasury stock in exchange

for Oceane bonds

(637) 459 6,123 5,945 5,945

Oceane buybacks 23,778 23,778 23,778

Share-based payments (985) (111,628) (112,613) (112,613)

Purchases and sales of treasury stock, net 366,740 (366,740)

Appropriation of profit (3,453) (3,453)


minority interests

(128,393) (128,393) (188) (128,581)

Transactions with shareholders (46) (18,115) 0 (1,202) 261,874 0 (51,497) (366,740) (175,726) (3,641) (179,367)


equity

(3,798) (3,798) (3,798)



operations and other

(594) 2,005 (8,988) (7,577) (360) (7,937)

Total recognized income and expenses 0 0 (4,392) 0 2,005 (8,988) 0 382,356 370,981 6,095 377,076

Equity at December 31, 2008 37,984 311,765 (9,109) 22,206 1,829,870 (70,235) (153,407) 382,356 2,351,430 14,544 2,365,974

ESSILOR The accompanying notes are an integral part of the interim consolidated financial statements Consolidated financial statements for the six months ended June 30, 2009

16

Notes to the interim consolidated financial statements

NOTE 1. ACCOUNTING POLICIES

In accordance with European Council regulation 1606/2002/EC of July 19, 2002, the Company has adopted as its

primary basis of accounting the International Financial Reporting Standards (IFRSs), International Accounting

Standards (IASs) and related interpretations adopted by the European Union as of the balance sheet date, and which

are posted on the European Commission website2.

The consolidated financial statements for the six months ended June 30, 2009 have been prepared in accordance

with IAS 34 – Interim Financial Reporting. They were approved by the Board of Directors on August 26, 2009.

The accounting policies used to prepare the interim consolidated financial statements are unchanged compared with

those applied in the 2008 consolidated financial statements.

The Company’s functional and presentation currency is the euro. All amounts are presented in thousands of euros,

unless otherwise specified.

♦ IFRSs, amendments to IFRSs and interpretations applicable from January 1, 2009

- IFRS 8 – Operating Segments

Under IFRS 8, which is applicable from January 1, 2009, segment information must be reported based on the

operating segments used by the Company for internal management purposes.

Details of the Company’s operating segments are presented in Note 1.2 below.

In accordance with the IFRS transition rules, comparative information has been restated.

- IFRIC 13 – Customer Loyalty Programs

This interpretation, which is applicable for annual periods beginning on or after July 1, 2008, describes the

accounting treatment of customer loyalty programs. The Company has applied this interpretation in its

interim financial statements for the period ended June 30, 2009 but has not adjusted prior periods to reflect

the interpretation as its impact on revenue is not material.

The impact of the interpretation on the financial statements for first-half 2009 is a reduction in revenue of

around €600,000 and a reduction in other income and expenses from operations of the same amount.

- Amendment to IAS 23 (revised) – Borrowing Costs

Under the amended version of IAS 23, which is applicable from January 1, 2009, borrowing costs that are

directly attributable to the acquisition, construction or production of a qualifying asset must be capitalized as

part of the cost of that asset. Previously, the benchmark treatment consisted of recognizing these costs as an

expense. The Company has no borrowing costs that are directly attributable to the acquisition, construction

or production of an asset.

- Amendment to IFRS 2 – Vesting Conditions and Cancellations

The amendments to IFRS 2 – Share-Based Payment, applicable from January 1, 2009, clarify the accounting

treatment of the cost of share-based payments when the vesting conditions are not met or the shares are

cancelled. The Company has no share-based payment plans for which the vesting conditions have not been

met or the shares cancelled.

2 http://ec.europa.eu/internal_market/accounting/ias/index_en.htm


17

- Amendment to IAS 32 – Puttable Financial Instruments and Obligations Arising on Liquidation

The amendment to IAS 32 allows certain puttable financial instruments that are similar to ordinary shares to

be classified as equity. It is applicable from January 1, 2009.

Essilor is not concerned by this amendment.

- IAS 1 (revised) – Presentation of Financial Statements (applicable for annual periods beginning on or after

January 1, 2009).

The revised standard requires separate presentation of (i) transactions with owners, in the statement of

changes in equity, and (ii) other transactions, in either a single statement of comprehensive income or in two

statements, an income statement and a statement of comprehensive income (called the consolidated

statement of total recognized income and expenses in these financial statements).

The share of profits of associates is now presented above profit before tax, rather than after profit of fully-

consolidated companies, which is no longer used.

- IFRIC 14 – IAS 19: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their

Interaction (applicable for annual periods beginning on or after December 31, 2008)

This interpretation describes the limits on the recognition of a defined benefit asset for plans with a

minimum funding requirement. The Company early adopted this interpretation in the 2008 consolidated

financial statements.

It has no impact on the Group’s consolidated financial statements.

♦ IFRSs, amendments to IFRSs and interpretations applicable in future periods

The Company did not early adopt the following standards, amendments to standards or interpretations:

- IFRS 3 (revised) – Business Combinations

IFRS 3 (revised), which is applicable for annual periods beginning on or after July 1, 2009, describes the

accounting treatment of business combinations based on the purchase method. In particular, goodwill may

now be calculated on the basis of either the fair value of the acquiree or the acquirer's proportionate share

of the acquiree's net assets. The choice between these two methods may be made separately for each

acquisition.

For step acquisitions, the difference between the carrying amount of the investment held before the

acquisition and its fair value at the acquisition date is recognized in profit or loss, along with the recyclable

components of other comprehensive income. Acquisition-related costs must be recognized as expenses and

not included in goodwill. Contingent consideration must be recognized at its acquisition-date fair value as

part of the consideration transferred in exchange for the acquiree, whether or not its payment is considered

probable. The obligation to pay contingent consideration must be recognized as a liability or as equity. Any

subsequent adjustments should be recognized in profit or loss or in equity depending on the initial

classification of the contingent consideration.

The revised standard will be applicable prospectively from the date of transition and will therefore have no

impact on the financial statements of earlier periods.

The impact of this revised standard on the consolidated financial statements is currently being assessed.

- IAS 27 (revised) – Consolidated and Separate Financial Statements

IAS 27 (revised), which is applicable for annual periods beginning on or after July 1, 2009, sets standards for

the preparation and presentation of individual and consolidated financial statements. In particular, it deals

with consolidation procedures and the partial disposal of an investment in a subsidiary that results in loss of

control. Under the revised standard, changes in a parent’s ownership interest in a subsidiary that do not

result in a loss of control are accounted for as equity transactions. In the case of a partial disposal that results

in a loss of control, any investment retained in the former subsidiary is measured at fair value and the

disposal gain or loss includes the fair value adjustment and the gain or loss on the sold interest, including all


18

amounts recognized in other comprehensive income in relation to the subsidiaries that are reclassified to

profit or loss on disposal.

The impact of this revised standard on the consolidated financial statements is currently being assessed.

- Amendment to IAS 39 – Eligible Hedged Items

This amendment, which is applicable from July 1, 2009 and has not yet been adopted by the European

Union, defines the items that are eligible for hedge accounting.

Its impact on the consolidated financial statements is currently being assessed.

- IFRIC 12 – Service Concession Arrangements (applicable for annual periods beginning on or after January 1,

2008).

This interpretation dealing with public service concessions is applicable from March 29, 2009.

The Company is not concerned by this interpretation.

- IFRIC 15 – Agreements for the Construction of Real Estate

This interpretation, which is applicable for annual periods beginning on or after January 1, 2009, concerns

the recognition of revenue from agreements for the construction of real estate.


- IFRIC 16 – Hedges of a Net Investment in a Foreign Operation

This interpretation, which is applicable for annual periods beginning on or after June 30, 2009, deals with the

recognition and measurement of hedges of net investments in foreign operations.



19

- IFRIC 17 – Distribution of Non-Cash Assets to Owners (non-cash dividends)

This interpretation, which is applicable for annual periods beginning on or after July 1, 2009 and has not yet

been adopted by the European Union, determines how non-cash dividends should be measured and requires

that the entity recognize any difference between the carrying amount of the assets distributed and the

carrying amount of the dividend payable in profit or loss.


- IFRIC 18 – Transfers of Assets from Customers

This interpretation, which is applicable for annual periods beginning on or after July 1, 2009 and has not yet

been adopted by the European Union, clarifies the rules governing the recognition and measurement of

transfers of assets from customers.


1.1. USE OF ESTIMATES

The preparation of financial statements involves the use of estimates and assumptions that may affect the reported

amounts of assets, liabilities, income and expenses in the financial statements as well as the disclosures in the notes

concerning contingent assets and liabilities at the balance sheet date. These estimates and assumptions, which were

determined based on the information available when the financial statements were drawn up, mainly concern

provisions for returned goods and trade receivables, product life cycles, pension and other post-employment benefit

obligations, restructuring provisions, provisions for tax and environmental liabilities, claims and litigation, the

measurement of goodwill, the measurement of purchased intangible assets and their estimated useful life, the fair

value of derivative financial instruments, deferred tax assets and share-based payments. The final amounts may be

different from these estimates.

The Company is subject to income tax in many jurisdictions with different tax rules and the determination of global

income tax expense is based to a significant extent on estimates and assumptions that reflect the information

available when the financial statements are drawn up.

First-half income tax expense recognized in the consolidated income statement is determined based on an estimate

of the effective tax rate that will be paid by the Company on annual profit, in accordance with IAS 34 – Interim

Financial Reporting.

1.2. SEGMENT INFORMATION

Since the adoption of IFRS 8 with effect from January 1, 2009, the Company’s segment information is presented in

accordance with the information provided internally to management for the purpose of managing operations,

making decisions and analyzing operational performance.

The information provided to management for internal management purposes is prepared in accordance with the

IFRSs used by the Company in its consolidation financial statements.

The Company is organized into two business segments – Lenses & Optical Instruments and Equipment.

The Lenses & Optical Instruments business segment comprises the Company’s lens business (production, finishing,

distribution and trading) and the instruments business (small equipment used by opticians and related to the sale of

lenses). The end customers for this business are eyecare professionals (opticians and optometrists).

The business is managed by region. The regions are as follows:

- Europe

- North America

- Rest of world

The Equipment business segment encompasses the production, distribution and sale of large equipment, such as

digital surfacing machines and lens polishing machines, used in manufacturing plants and prescription laboratories

for finishing operations on semi-finished lenses. The end customers for this business segment are optical lens

manufacturers.


20

The indicators presented are the following:

- External revenue (defined in Note 1.11 Revenue in the 2008 consolidated financial statements)

- Elimination of intragroup revenue

- Consolidated revenue

- Operating profit

- Non-cash income and expenses, which includes share-based payments, goodwill impairment losses and

Oceane expenses

- Interest income and expense, corresponding to finance costs, net in the consolidated cash flow statement

- Income tax expense (defined in Note 1.18 Income Tax Expense in the 2008 consolidated financial

statements)

- Share of profits of associates

- Impairment, depreciation and amortization of property, plant and equipment and intangible assets

- Acquisitions of property, plant and equipment and intangible assets

- Non-current assets

- Total assets

- Provisions for contingencies and charges (defined in Note 1.31 Pension and Other Post-Employment

Benefit Obligations and Note 1.32 Provisions in the 2008 consolidated financial statements)

- Short-term borrowings and operating liabilities

1.3. CONSOLIDATED CASH FLOW STATEMENT

The cash flow statement has been prepared by the indirect method, whereby profit is adjusted for the effects of non-

cash transactions, any deferrals or accruals of past or future operating cash receipts or payments, and items of

income or expense associated with investing or financing cash flows.

In the consolidated cash flow statement:

� Changes in current assets and liabilities are stated before the effect of changes in scope of consolidation and

exchange rates.

� Cash flows of foreign subsidiaries are translated at the average exchange rate for the period.

� Profit before non-cash items and share of profits of associates, net of dividends received, is defined as profit of

fully-consolidated companies before depreciation, amortization and provisions (other than provisions for

impairment of current assets) and other non-cash items (mainly the costs of stock option plans and employee

stock ownership plans), plus dividends received from associates.

� The effect of changes in exchange rates on cash and cash equivalents corresponds to the effect of (i) changes in

exchange rates between the beginning and end of the period and (ii) differences between the closing exchange

rate and the average rate for the period on movements for the period.

� The amounts reported for acquisitions (sales) of subsidiaries correspond to the purchase price (sale proceeds)

less the cash and cash equivalents of the acquired (sold) subsidiary at the transaction date.

� Cash and cash equivalents in the cash flow statement correspond to cash and marketable securities qualifying as

cash equivalents less bank overdrafts. Marketable securities, consisting mainly of units in money market funds,

make up the bulk of the Group’s cash investments and are qualified as cash equivalents when the fund’s

management objectives fulfill the criteria specified in IAS 7.

Marketable securities that do not fulfill these criteria are not classified as cash equivalents. Purchases and sales

of these securities are treated as cash flows from financing activities.

1.4. OTHER INCOME AND EXPENSES FROM OPERATIONS

Other income and expenses from operations mainly comprise:

- Restructuring costs

- Costs of claims and litigation

- Impairment losses on goodwill, intangible assets and property, plant and equipment

- Compensation costs on share-based payments


21

1.5. BORROWINGS

Borrowings are initially recognized at an amount corresponding to the issue proceeds net of directly attributable

transaction costs.

Any difference between this amount and the redemption price is recognized in profit over the life of the debt by the

effective interest method.

In accordance with IAS 32, the conversion option embedded in convertible bonds is separated from the host contract

and recognized in equity, net of deferred taxes.

The conversion option is initially recognized at an amount corresponding to the difference between the convertible

bond issue proceeds net of directly attributable transaction costs and the present value of vanilla bonds with the

same characteristics.

Any difference between the carrying amount of convertible bonds, excluding the conversion option, and the

redemption price is recognized in profit over the life of the debt using the effective interest method.

The purchase cost of any Oceane convertible bonds bought back by the Company is allocated between the debt

instrument and the equity instrument based on market interest rates at the buyback date for bonds with a maturity

corresponding to the remaining life of the Oceanes, using the same method as that applied at the issue date.

- The difference between the carrying amount of the debt at the buyback date (amortized cost) and the portion

of the purchase price corresponding to the debt instrument is recognized in profit.

- The portion of the purchase price corresponding to the equity instrument is recognized directly in equity, net of

deferred taxes.


22

NOTE 2. EXCHANGE RATES AND SCOPE OF CONSOLIDATION

2.1. EXCHANGE RATES OF THE MAIN FUNCTIONAL CURRENCIES

For €1 Closing rate Average rate

June 30, 2009 Dec. 31, 2008 June 30, 2008 First-half 2009 Fiscal 2008 First-half 2008

Canadian dollar 1.63 1.70 1.43 1.60 1.57 1.55

Pound sterling 0.85 0.95 0.67 0.89 0.80 0.78

Yen 135.51 126.14 165.61 128.41 151.53 161.02

U.S. dollar 1.41 1.39 1.35 1.34 1.47 1.54

Swiss franc 1.53 1.49 1.61 1.51 1.58 1.60

2.2. CHANGES IN THE SCOPE OF CONSOLIDATION

• Newly-consolidated companies

The following companies were consolidated for the first time in first-half 2009:

Name Country Consolidated from Consolidation

method

% interest % consolidated

J.Z.O Poland March 25, 2009 Full 51.00 100.00

Abba Optical United States May 1, 2009 Business acquisition

Barnett & Ramel co. United States June 1, 2009 Full 80.00 100.00

Mc Leodd Opticals United States June 1, 2009 Full 80.00 100.00

Technopark Brazil April 30, 2009 Full 51.00 100.00

Unique Ophtalmic* Singapore January 1, 2009 Full 100.00 100.00

NERC Japan February 5, 2009 Proportionate 50.00 50.00

* Companies acquired or set up in prior years, consolidated for the first time in 2009.

The first-half 2009 income statement also includes the contribution over the full six months of the following

companies that were consolidated for the first time in 2008:

Name Country Consolidated from Consolidation

method

% interest % consolidated

Satisloh Zhongshan China October 1, 2008 Full 100.00 100.00

Satisloh Shenzen China October 1, 2008 Full 100.00 100.00

Omega Czech Republic September 1, 2008 Full 80.00 100.00

Satisloh SAS France October 1, 2008 Full 100.00 100.00

Nika Germany July 1, 2008 Full 74.90 100.00

Satisloh Gmbh Germany October 1, 2008 Full 100.00 100.00

Satisloh Asia and Trading

Ltd

Hong Kong October 1, 2008 Full 100.00 100.00

20-20 Optics India March 1, 2008 Full 70.00 100.00

Sankar India July 1, 2008 Full 70.00 100.00

Satisloh India India October 1, 2008 Full 100.00 100.00

Oftalmika Galileo Spa Italy April 1, 2008 Full 100.00 100.00

Satisloh Spa Italy October 1, 2008 Full 100.00 100.00

Frames and Lenses Malaysia July 1, 2008 Full 80.00 100.00

O’Max Netherlands March 1, 2008 Full 51.00 100.00

Epodi Philippines March 1, 2008 Full 51.00 100.00

Rainbow Optical Puerto Rico February 1, 2008 Full 100.00 100.00

Omega Slovakia Slovakia September 1, 2008 Full 80.00 100.00


23

Satisloh Iberica Spain October 1, 2008 Full 100.00 100.00

Satisloh Holding AG Switzerland October 1, 2008 Full 100.00 100.00

Satisloh AG Switzerland October 1, 2008 Full 100.00 100.00

Satisloh Photonics AG Switzerland October 1, 2008 Full 100.00 100.00

Satisloh Ltd United Kingdom October 1, 2008 Full 100.00 100.00

Advance Optical United States March 1, 2008 Full 90.00 100.00

Empire United States April 1, 2008 Full 85.00 100.00

Future Optics United States April 1, 2008 Full 80.00 100.00

Deschutes United States May 1, 2008 Full 80.00 100.00

Optimatrix United States July 1, 2008 Full 80.00 100.00

Collard Rose United States August 1, 2008 Full 80.00 100.00

Satisloh Inc United States October 1,2008 Full 100.00 100.00

Dependable United States October 1, 2008 Full 80.00 100.00

Next Generation United States November 1, 2008 Full 100.00 100.00

High Tech Optical United States December 1, 2008 Business acquisition

Southwest Lens United States December 1, 2008 Full 65.00 65.00

North Eastern Eye Institute United States December 1, 2008 Business acquisition

Pech Optical United States December 1, 2008 Full 80.00 100.00

• Other movements

Following the acquisition on January 1, 2009 of an additional 10% interest in Indian company GKB Rx Lens, that was

previously 50%-owned, the company is now fully consolidated, whereas previously it was consolidated by the

proportionate method on a 50% basis.

Following the acquisition by Nikon Canada on June 1, 2009 of 50% of Canadian company Tech Cite, Essilor’s stake in

Tech Cite has increased to 50% from 25%. The company is still consolidated using the proportional method.

The Company’s interest in ILT Singapore increased to 100% from 51% on March 31, 2009.


24

2.3. IMPACT OF CHANGES IN EXCHANGE RATES AND SCOPE OF CONSOLIDATION

♦ Balance Sheet

The impact of changes in the scope of consolidation on the consolidated balance sheet is analyzed below:

€ thousands

Companies

consolidated

for the first

time in first-

half 2009

Intangible assets 173

Property, plant and equipment 3,790

Non-current financial assets 74

Other non-current assets 186

Current assets 9,205

Cash and cash equivalents 1,884

Total assets acquired 15,312

Minority interests in equity 954

Long-term borrowings

Other non-current liabilities 1,108

Short-term borrowings 368

Other current liabilities 9,250

Total liabilities assumed 11,680

NET ASSETS ACQUIRED 3,631

Acquisition cost 26,788

. - Acquisitions for the period (paid in cash) 23,631

. - Prior period acquisitions 3,157

- Fair value of net assets acquired 3,632

- Put options granted to minority shareholders (14,337)

+ Post-acquisition retained earnings (172)

Recognized goodwill 37,321

The amount recognized as goodwill is supported by projected synergistic benefits and the growth outlook of the

acquired companies within Essilor.

The fair values of the acquired assets and assumed liabilities are based on the provisional accounting for the business

combination and may be adjusted once the valuation process has been completed or additional analyses have been

performed. Any such adjustments will be treated as a retrospective adjustment of goodwill if they are made within

twelve months of the acquisition date. Any adjustments made more than twelve months after the acquisition date

will be recognized directly in profit, unless they correspond to corrections of errors.


25

♦ Income Statement

The overall effect of changes in scope of consolidation and exchange rates on first-half 2009 revenue, contribution

from operations and operating profit was as follows:

First-half 2009 vs. first-half 2008

In % Reported

growth

Impact of

changes in

exchange

rates

Impact of

changes in

consolidation

scope

Like-for-like

growth

Revenue 9.4% 4.1% 6.0% -0.7%

Contribution from

operations

9.5% 4.9% 1.3% 3.3%

Operating profit 7.7% 4.9% 1.3% 1.5%

NOTE 3. SEGMENT INFORMATION

Revenue is attributed by origin (invoicing country).

Sign convention: income (expense)

FIRST-HALF 2009 Lenses

Europe

Lenses

North

America

Lenses

Rest of

World

Equipment Elimination

of

intersegment

revenue

Group

total

External revenue 665 718 230 50 1,663

Inter-region revenue 36 24 89 16 (165) 0

Total revenue 701 742 319 66 (165) 1,663

Contribution to operating

profit

79 130 72 1 282

Non-cash income and expsenes (10) (1) (11)

Interest income 7 1 1 0 9

Interest expense (10) (6) (1) (0) (17)

Income tax expense (20) (41) (18) (1) (80)

Share of profits of

associates

3 4 3 11

Impairment, depreciation and

amortization of property, plant and

equipment and intangible asets (32) (28) (21) (3) (84)

Acquisitions of property, plant and

equipment and intangible assets 22 30 22 2 76

Non-current assets 577 835 280 318 2,010

Total assets 1,733 1,285 763 383 4,164

Provisions 121 27 9 17 174

Short-term borrowings and operating

liabilities 867 491 155 25 1,538


26

FIRST-HALF 2008 Lenses

Europe

Lenses

North

America

Lenses

Rest of

World


of

intersegment

revenue

Group

total

External revenue 693 618 208 1 1,520


Total revenue 730 641 276 5 (132) 1,520

Operating profit 85 120 56 1 262

Non-cash income and expsenes (12) (12)

Interest income 12 1 1 14

Interest expense (5) (6) (1) (12)

Income tax expense (29) (35) (13) (77)

Share of profits of

associates

8 5 2 15



equipment and intangible asets (30) (19) (16) (65)




Total assets 1,764 1,061 646 5 3,476

Provisions 104 19 5 0 128

Borrowings and operating liabilities 617 439 141 2 1,199

FISCAL 2008 Lenses

Europe

Lenses

North

America

Lenses

Rest of

World


of

intersegment

revenue

Group

total

External revenue 1,356 1,253 429 36 3,074


Total revenue 1,428 1,302 570 49 (275) 3,074

Operating profit 159 235 122 (1) 515

Non-cash income and expsenes (25) (25)

Interest income 24 2 3 29

Interest expense (14) (13) (1) (28)

Income tax expense (51) (69) (30) 1 (149)

Share of profits of

associates

12 10 4 26



equipment and intangible asets (68) (42) (34) (2) (146)




Total assets 1,750 1,224 675 418 4,067

Provisions 118 25 8 18 169

Borrowings and operating liabilities 879 476 140 37 1,532


27

The Company's top 20 customers accounted for 22.3% of revenue in first-half 2009 (2008: 23.4%).

No single customer accounts for more than 10% of the Company’s revenue.

NOTE 4. OTHER INCOME AND EXPENSES FROM OPERATIONS, NET

First-half

2009

First-half

2008

Fiscal

2008

€ thousands (6 months) (6 months) (12 months)

By nature

Impairment losses 0 0 0

Compensation costs of stock options (4,038) (4,703) (9,792)

Compensation costs of employee share issues (632) (1,368) (1,582)

Compensation costs of performance share grants (5,016) (6,104) (13,532)

Restructuring costs, net (6,524) (247) (3,736)

Other income and expenses from operations (4,223) (2,301) (7,357)

Total (20,433) (14,723) (35,999)

NOTE 5. OTHER FINANCIAL INCOME AND EXPENSES, NET

First-half

2009

First-half

2008

Fiscal

2008

€ thousands (6 months) (6 months) (12 months)

By nature

(Charges to)/reversals of provisions for impairment of

available-for-

sale financial assets, net (45) (1,811) (1,530)

Exchange gains and losses, net 12,566 1,473 (1,305)

Changes in fair value of derivative financial instruments (10,697) 1,229 (1,391)

Dividends 304 67 858

Other financial income and expenses 2 0 0

Total 2,130 958 (3,368)


28

NOTE 6. CHANGE IN NUMBER OF SHARES

Change in outstanding shares, net of treasury shares

First-half

2009

First-half

2008 Fiscal 2008

Number of shares at January 1 207,013,917 208,619,505 208,619,505

Shares issued on exercise of stock options 217,190 165,448 452,913

Shares issued to the Essilor corporate mutual

fund 425,898 433,429 720,144

Treasury shares allocated on conversion of

Oceane bonds 188,752

Shares sold out of treasury on exercise of stock

options 18,918 52,928 64,929

Delivery of performance shares 1,854 72

Shares issued on conversion of Oceane bonds 66 167,486 167,674

(Purchases) and sales of treasury stock, net (679,698) (1,700,000) (3,200,000)

Number of shares at the period-end 206,998,145 207,738,868 207,013,917

Number of treasury shares excluded from the

calculation 4,664,931 4,306,810 4,006,005

Average number of shares, net of treasury shares

First-half

2009

First-half

2008 Fiscal 2008

Number of shares at January 1 207,013,917 208,619,505 208,619,505

Shares issued on exercise of stock options 63,125 6,363 95,765

Shares issued to the Essilor corporate mutual

fund 11,765 7,144 230,851

Treasury shares allocated on conversion of

Oceane convertible bonds 62,917

Shares sold out of treasury on exercise of stock

options 11,060 27,119 42,000

Treasury shares used to make performance share

grants 906 60

Shares issued on conversion of Oceane bonds 44 6,442 87,406

(Purchases) and sales of treasury stock, net (477,642) (1,441,978) (2,263,839)

Number of shares at the period-end 206,623,175 207,224,655 206,874,605


29

NOTE 7. GOODWILL

€ thousands

At January 1

Changes in

consolidation

scope and

acquisitions

Other

movement

s

Translation

adjustment

Impairme

nt losses

recognize

d in the

period

At period-

end

First-half 2009

Gross 973,331 37,321 2,558 (2,313) 1,010,897

Impairment losses 15,726 232 10 15,968

Carrying amount 957,605 37,321 2,558 (2,545) (10) 994,929

Fiscal 2008

Gross 607,770 359,542 (5,505) 11,524 973,331

Impairment losses 16,623 (933) 36 15,726

Carrying amount 591,147 359,542 (5,505) 12,457 (36) 957,605

The carrying amount of goodwill breaks down as follows by segment:

€ thousands June 30,

December

31,

2009 2008

Europe 199,837 179,715

North America 489,638 486,155

Rest of World 64,972 53,462

Equipment 240,482 238,273

994,929 957,605

Goodwill for companies acquired in the second half of 2008 and the first half of 2009 is based on the provisional

accounting for the business combination and may be adjusted during the 12-month period from the acquisition date.

NOTE 8. NET DEBT

€ thousands June 30,

2009

Dec. 31,

2008

Oceane convertible bonds 170,677 168,310

Other long-term borrowings 289,795 269,307

Short-term borrowings 223,438 190,872

Bank overdrafts 10,570 18,806

Accrued interest 4,065 3,157

Total borrowings 698,545 650,452

Marketable securities* 33,123 32,538

Cash equivalents 255,117 319,596

Cash 199,134 185,975

Total assets 487,374 538,109

Net debt 211,171 112,343

* Marketable securities not qualifying as cash equivalents that the Company considers as eligible for

inclusion in the calculation of net debt


30

At June 30, 2009, a total of 3,280,878 Oceanes were outstanding.

Following the July 16, 2007 two-for-one stock-split (see below), outstanding Oceanes are convertible or exchangeable

on the basis of one bond for two new shares with a par value of €0.18.

NOTE 9. OFF-BALANCE SHEET COMMITMENTS

There were no material changes in the amount or nature of off-balance sheet commitments during first-half 2009

compared with December 31, 2008.

NOTE 10. ESSILOR INTERNATIONAL FINANCIAL STATEMENTS

€ millions First-half 2009

(6 months)

Fiscal 2008

(12 months)

First-half 2008

(6 months)

Revenue 341 714 378

Net profit 141 239 182

NOTE 11. SUBSEQUENT EVENTS

In July 2009, Essilor acquired all outstanding shares in De Ceunynck, a major player in the Belgian market where the

company is BBGR’s long-time distributor. De Ceunynck reported 2008 revenue of €17 million, with a prescription

laboratory near Antwerp and 92 employees. The current management team will remain in place.

In the United States, Essilor is continuing to expand its network with the acquisition of Apex Optical ($2.7 million in

revenue) and Vision Pointe Optical ($1.1 million in revenue), two prescription laboratories located respectively in

Florida and Idaho. Essilor has also acquired a majority interest in OptiSource International ($5.3 million in revenue), a

manufacturer and distributor of equipment and consumables for opticians and laboratories.

__________

31

Statement by the Person Responsible for

the 2009 Interim Financial Report

I declare that, to the best of my knowledge, (i) the financial statements for the first six months of

2009 have been prepared in accordance with the applicable accounting standards and give a true

and fair view of the assets and liabilities, financial position and results of Essilor International and

the consolidated companies, and (ii) the accompanying interim management report includes a

fair review of significant events of the past six months, their impact on the interim financial

statements and the main related party transactions for the period, as well as a description of the

main risks and uncertainties in the second half of the year.

Charenton-le-Pont, France, August 27, 2009

Xavier Fontanet

Chairman and Chief Executive Officer

32

STATUTORY AUDITORS’ REVIEW REPORT ON THE 2009

HALF-YEAR FINANCIAL INFORMATION

To the Shareholders

This is a free translation into English of the Statutory Auditors’ review report issued in French and is

provided solely for the convenience of English speaking readers. This report should be read in conjunction

with, and construed in accordance with, French law and professional auditing standards applicable in

France.

In compliance with the assignment entrusted to us by your Annual General Meeting and in accordance

with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code , we hereby

report to you on:

� the review of the accompanying condensed half-year consolidated financial statements of ESSILOR

INTERNATIONAL, for the six months ended June 30, 2009 ;

� the verification of the information contained in the half-year management report.

These condensed half-year consolidated financial statements are the responsibility of the Board of

Directors. Our role is to express a conclusion on these financial statements based on our review.

1. Conclusion on the financial statements

We conducted our review in accordance with professional standards applicable in France. A review of

interim financial information consists of making inquiries, primarily of persons responsible for financial

and accounting matters, and applying analytical and other review procedures. A review is substantially

less in scope than an audit conducted in accordance with professional standards applicable in France and

consequently does not enable us to obtain assurance that we would become aware of all significant

matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying

condensed half-year consolidated financial statements are not prepared, in all material respects, in

accordance with IAS 34 - the standard of IFRSs as adopted by the European Union applicable to interim

financial information.

We draw your attention to Note 1 to the condensed interim consolidated financial statements entitled

“Accounting Policies”, which presents the new standards applicable from January 1, 2009, particularly the

amendment to IAS 1 “Presentation of Financial Statements” and IFRS 8 “Operating Segments”. This

observation does not affect the conclusion set out above.

33

2. Specific verification

We have also verified the information given in the half-year management report on the condensed half-

year consolidated financial statements subject to our review.

We have no matters to report as to its fair presentation and consistency with the condensed half-year

consolidated financial statements.

Neuilly-sur-Seine and Courbevoie, August 26, 2009

The Statutory Auditors

P R I C E W A T E R H O U S E C O O

P E R S A U D I T

Jacques DENIZEAU

M A Z A R S

Pierre SARDET

2009 interim financial report essilor international€¦ · statutory auditor’s review report on...

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